Automotive group receives a financial helping hand from the French government to assist its recovery plan
Matt Burt
31 July 2013

The EU Commission has ruled that 571.9m euros (£498m) of restructuring aid that the French government is offering to struggling PSA Peugeot Citroën doesn't contravene European state aid laws.

The decision, made yesterday, came after an in-depth Commission investigation into whether the financial aid would distort the new car market or unfairly hamper PSA Peugeot Citroën's rivals that are not receiving such help. The Commission concluded that the restructuring plan, together with undertakings made by the French authorities, will enable the PSA group to return to viability.

"Following an in-depth investigation, we have arrived at a formula which allows PSA to restructure in accordance with clear limits, reducing to a minimum the damaging effects for competitors who have not received support from public funding. This is a balanced result which offers the PSA group the chance to make a new start on a sound basis," said Joaquín Almunia, Vice-President of the EU Commission with responsibility for competition policy.

Last summer PSA laid out a restructuring plan that involves measures such as halting production at its Aulnay plant and cutting more than 11,000 jobs across its business.

As part of the restructuring aid, PSA Peugeot Citroën will receive a repayable advance of 85.9m euros to implement its '50CO2Cars' research and development project, which is focused on producing low-emissions vehicles and engines. Another part of the aid deal stipulates that the PSA group will have to contribute to the cost of its restructuring through a sale of assets.

PSA Peugeot Citroën's mid-year financial results, issued today, suggest that its alliance with General Motors and the raft of cost-cutting measures implemented over the past 12 months are beginning to have a positive effect on the group's health. Strong car sales in China, where Peugeot Citroen enjoyed a 33 per cent year-on-year sales increase, helped to offset the continuing stagnation of the European market.

 

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Comments
14

31 July 2013

For the sake of choice, and competition i think its very important PSA survive, and if this is what it takes then its good. But i feel the real issue, and one they havent dealt with yet, is that they just dont make cars people want or ones that stand out from the alternatives. 20 years ago they did. 15 years ago they still did, and around 10 years ago they stopped.

The newer ranges are improving, but they need to go a lot further, and they also have the Koreans to deal with now as well.

Of course a company that is only just keeping going cant be investing that much into its products. Hopefully this loan/grant will help 

31 July 2013

If PSA are to survive they need to start building cars that people actually want to buy.

 

I'm a disillusioned former Citroëniste.

31 July 2013

Frightmare Bob wrote:

If PSA are to survive they need to start building cars that people actually want to buy.

Citroen DS3 Racing? DS5? Pug 3008? RCZ? All successful cars for the brands and cars that people want to buy. Maybe you need to visit one of their showrooms in the present day.


"Work hard and be nice to people"

31 July 2013

Mini2 wrote:

Frightmare Bob wrote:

If PSA are to survive they need to start building cars that people actually want to buy.

Citroen DS3 Racing? DS5? Pug 3008? RCZ? All successful cars for the brands and cars that people want to buy. Maybe you need to visit one of their showrooms in the present day.

But these are all niche cars. And whilst i am sure they are reasonably profitable, its the mainstream where they have really dropped the ball. Citroen C3, C4, and C5, Peugeot 308 and 508, all dull, all struggle to sell, and i am sure are not profitable. Of all their mainstream cars only the 208 is doing well. Its these mass market cars they really need to sort out quickly. Hopefully the soon to be released new 308 will be the start of this

1 August 2013

artill wrote:

Mini2 wrote:

Frightmare Bob wrote:

If PSA are to survive they need to start building cars that people actually want to buy.

Citroen DS3 Racing? DS5? Pug 3008? RCZ? All successful cars for the brands and cars that people want to buy. Maybe you need to visit one of their showrooms in the present day.

But these are all niche cars. And whilst i am sure they are reasonably profitable, its the mainstream where they have really dropped the ball. Citroen C3, C4, and C5, Peugeot 308 and 508, all dull, all struggle to sell, and i am sure are not profitable. Of all their mainstream cars only the 208 is doing well. Its these mass market cars they really need to sort out quickly. Hopefully the soon to be released new 308 will be the start of this

Prefer the run of the mill DS3 to the Mini and the DS4 to the Focus/Golf. If only Peuguot could get the Magazines to stop their prefence to BMW, VW etc..    Just my opinion

 

Hydrogen cars just went POP

1 August 2013

The reason why magazines have preferences to BMW VW etc. is probably that they are better cars. 

1 August 2013

xxxx wrote:

If only Peuguot could get the Magazines to stop their prefence to BMW, VW etc..   

Surprisingly to some, journos are only human. They fear loss of advertising revenue, which affects their jobs. They also fear that if they are too frank, the gardening correspondent of the "Tooting Tooter" (who also doubles as the motoring writer) will jump the queue to test the latest model and the health of their publication depends on "being first with the latest". Additionally they don't want that nice few days driving cars in the Maritime Alps to be replaced by one night in a shared caravan at Ingoldmells!

Courage mes braves! The J.D. Power survey shows that information contradicting received opinion can surface. That vehicle you praised to the skies is a bit of an overpriced dog in reality; certainly no better than indifferent. Likewise another car you were sniffy about is actually the class leader. Try and avoid being made to look a bit foolish by such results.

1 August 2013

 

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I'm a disillusioned former Citroëniste.

31 July 2013

In the overall scheme of things 570m Euros isn't a lot of money to a big car company - it's probably less than what is required to develop and launch a single new model.

So the question is, will this loan be enough to turn around the ailing French giant, or will it just delay the inevitable? 

31 July 2013

Apparently the new 2008 is flying out of the doors. The factory has doubled the shift and is struggling to meet demand. This won't help quality but it must be a good sign that PSA are making cars that people want.

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